RR Donnelley Q1 Profits Up
-- Graphic Arts Online, 5/7/2008 12:10:00 PM
RR Donnelley & Sons, Chicago, posted a 32% jump in Q1 net income to $182.5 million, amid a tax gain, as acquisitions lifted U.S. sales and the weaker dollar boosted international results. Net sales rose 7.3% to $3 billion.Sales were helped by the company's acquisition last year, including Banta Corp., Von Hoffmann, Perry Judd's Holdings and Cardinal Brands. In February, R.R. Donnelley said it bought privately held newspaper-inserts maker Pro Line Printing Inc. for $122 million in cash.
"In the context of a challenging economic environment, we benefited from both the ability to manage our customers' print spend across our broad product and service offering,” says president and CEO Thomas Quinlan III, “and from the operational flexibility we have created through our historical platform investments.”
Gross margin fell to 26% from 26.4%, mainly due to the acquired companies' carrying lower margins, unfavorable product mixes and pricing pressures.
U.S. sales, the company's primary focus, rose 6.6% to $2.2 billion, helped by the acquisitions and higher sales of logistics services, labels and catalogs. International revenue rose 9.5% to $756.4 million, as the weak dollar and strong sales in Asia and Latin America boosted results.
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